Pittsburgh value-added aluminium firm Arconic Inc. reported results for the second quarter yesterday. The firm’s results beat estimates across all three segments in the quarter.
In the second quarter, Arconic reported a revenue of US$3.6 billion, a 10-percent improvement over last year’s second quarter. Net income fell to US$120 million, down from last year’s second-quarter total of US$212 million. Net income less special items for the quarter came to US$185 million, up year-on-year from last year’s second-quarter total of US$165 million.
As to the company’s trio of operating segments, Engineered Products & Solutions (EP&S) led the charge with a reported revenue of US$1.6 billion, up 7 percent over last year. Volume growth in aerospace engines and defense helped to propel the number upward, while negative physical inventory, a poor product mix, and issues with Rings and Disks tempered what may have been a higher result.
Global Rolled Products (GRP) followed closely behind with a quarterly revenue of US$1.5 billion, which was good for a 14-percent rise year-on-year. Segment operating profit was off by US$10 million year-on-year however, falling to US$123 million due to unfavorable aerospace wide-body production mix and a rise in aluminium prices.
Bringing up the rear was Transportation and Construction Solutions (TCS), showing a revenue of US$562 million in the quarter, which was 12 percent above last year’s second quarter. An increased volume in commercial transportation and building and construction helped make up for an increase in aluminium prices in the quarter.
Arconic Chief Executive Officer Chip Blankenship noted the significant improvements made in the quarter, noting that they were a prelude to even greater advances.
“In the second quarter, Arconic delivered strong organic revenue growth and doubled adjusted free cash flow. We announced contract awards at the Farnborough International Airshow, providing groundwork for exciting growth with valued customers. We have initiated the sale process of our Building and Construction Systems business as the first outcome of our ongoing strategy review. Our team is delivering operational improvements where we need it the most. While there is plenty of work yet to be done, we are driving progress and generating positive momentum.”
Going forward, Arconic made no change to its full-year guidance for 2018, forecasting a revenue of US$13.7 billion to US$14.0 billion, earnings per share excluding special items of US$1.17 to US$1.27, and adjusted free cash flow of around US$250 million.